Pebb, partners pay $43M for downtown Fort Lauderdale office building
Partnership acquired 110 East, 24-story tower that is about 50% occupied
Pebb Capital, Intalex Capital and CDS International Holdings joined forces to acquire a half-empty office building in downtown Fort Lauderdale for $43 million.
The partnership expects to ramp up tenant occupancy at 110 East in the coming months, and has already signed more than 70,000 square feet of new leases, said Pebb Chairman Todd Rosenberg. The 24-story tower is at 110 East Broward Boulevard.
The deal breaks down to $125 a square foot for the 343,500-square-foot building.
A CBRE team led by Christian Lee and Andrew Chilgren represented the buyer and seller, an affiliate of San Francisco-based Stockbridge Capital Group, according to a press release. CDS, a Delray Beach-based family office led by Carl DeSantis, was also represented by Greenwall Capital Management and Kapp Morrison law firm.
The Stockbridge affiliate paid $41.1 million for the building in 2017, records show.
Pebb, Intalex and CDS competed against several bidders after 110 East hit the market without an asking price last year, Rosenberg said.
“It came down to our price and our ability to execute,” he said. “Ultimately the deal came to fruition despite the many, many headwinds we faced since we went under contract.”
Among the issues, access to capital was more difficult and took longer than expected amid a general unease surrounding office properties, Rosenberg said.
As soon as the partners put up a nonrefundable deposit, he and Intalex Capital Managing Partner Bryson Ridgeway worked with their leasing team to push 110 East’s occupancy above 50 percent, Rosenberg said.
The new leases “were completed prior to us even closing, which puts us in a much better position,” Rosenberg said. “We are also negotiating with a lot of other potential tenants interested in coming into this building.”
The tenant mix includes engineering firms, law practices and administrative offices for various companies, Rosenberg said. The partnership plans on improving 110 East’s common areas that were completely renovated by the seller, he added.
The new owners also plan to provide tenant improvements and concessions at a very “attractive rent number,” Rosenberg said. The asking rent at 110 East starts in the low $30 range.
Travis Herring and Katherine Rideway with Cushman & Wakefield are handling leasing. If successful in negotiating the new leases, 110 East will fill up another 125,000 square feet to stabilize the building’s occupancy, Rosenberg said.
Founded in 2014, Boca Raton-based Pebb Capital has amassed a commercial real estate portfolio worth more than $2 billion, the release states. Fort Lauderdale-based Intalex has developed more than $1.5 billion of office, medical office, retail, and multifamily projects since 2006. CDS’ real estate holdings include a Bank of America-leased office property in Delray Beach it acquired for $25 million last year; and another office building in Delray Beach it acquired for $3.1 million in 2019.